Sir,
we had quoted for a rewinding job with M/s.FACT LTD (Public sector undertaking) . They had asked in the tender to quote rates inclusive of all taxes and duties. Hence we quoted a rate and we specifically mention that the rates include only vat tax and service providers liability towards service tax , which is (Base amt X 70% X 12.36%)1/2
which is same as Base Amt. X 4.326% . We specifically mentioned in the quotation that service receivers liability towards service tax not included in the rate quoted and will be your responsibility. However when the work order was issued it was specifically mention that the rate includes vat tax and 8.652% service tax. From this we understood that the rate of service tax mentioned had both service providers liability and service receivers liability. We objected and sent a letter, but the company informed that virtue of reverse charge mechanism, we will have to bare service receivers liability also. Kindly advise.
CAclubindia
